General News
Below are links to stories of general interest in relation to aviation and airports.
Holland-Kaye interview – unsurprisingly pushes case for larger hub, which means ‘No’ to Gatwick
In a long, slightly obsequious, interview with John Holland-Kaye in Management Today, there are a couple of useful points. Holland-Kaye gives his usual responses to the typical questions, and thought he glosses over anything that does not suit his case, many are persuaded by him (as long as what he says is not critically challenged). One of the main questions is to what extent there will be a continuing, or even a growing, need for a massive hub airport to provide a greater supply of transfer passengers and fill large long-haul aircraft like the A380. Holland-Kaye is paid to say there is. However, it may be that the future model is the new generation of smaller long-range twin-engined planes such as Boeing’s 787 Dreamliner that fly point to point. In that case, the regional airports don't need to use Heathrow and can have their own direct flights. Management Today wonders, having listened to H-K's stock of good answers, why "If it’s all so simple, why wasn’t the decision taken years ago?" It's not just the politics. The economic justification, rather than just going with the macho "winning the global race" mantra, is fragile.
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Public invited to Gatwick drop-in session with Airports Commission 6 – 8pm on Tues 16th December in Crawley
On Tuesday 16th December, the Airports Commission will be holding its second full public discussion day on airport runway proposals, about Gatwick. The first was about Heathrow, on 3rd December. The Commission has now announced there will be a public drop-in session, available to anyone who wishes to attend, from 6 - 8pm on Tuesday 16th. There is no need to have a ticket. The Commission says the purpose of this drop in session is for Commission staff to hear first-hand from people to be affected locally. Commission staff will be available to answer questions, and help people find the information they need in order to respond to the Airports Commission runway consultation, that closes on 3rd February. The main meeting during the day is by ticket only, as capacity is limited and there has been huge demand. There are no more tickets available. However, the Commission will be publishing a full transcript on their website so those unable to attend can read what was said. But everyone is invited to attend the 6 - 8pm session at the Arora Hotel, Crawley.
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Near miss of drone with plane landing at Heathrow in July – unregulated drones a potential safety hazard
The CAA has released information about a category A (the most serious risk of collision) near miss incident, of an Airbus A320 (which can carry up to 180 people) approaching Heathrow, over London, coming close to an unidentified drone. The incident was on 22nd July 2014 at 1416 GMT. The A320 pilot reported seeing a helicopter-style drone as the jet was 700 feet off the ground. The CAA has not identified the airline. The drone is reported to have been within 20 feet of the plane's wing. The drone had not appeared on air traffic control radar and disappeared after the encounter. In another incident, in May 2014 the pilot of an ATR 72 turbo-prop plane reported seeing a helicopter drone only 80 feet away as he approached Southend at a height of 1,500 feet. Now BALPA has warned that the large number of drones operated by amateur enthusiasts now poses "a real risk" to commercial aircraft. Sales of drones have increased rapidly, with UK sales of 1,000 - 2,000 every month. Costing as little as £35 for a basic one, they will be popular as Christmas presents - more advanced drones costing £3,000 can carry a high definition camera. Buyers have no training, but they are meant to stay below 400ft and avoid areas close to airports. There is no way to enforce these requirements.
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70th anniversary of the Chicago Convention – there is STILL no tax on jet fuel for commercial planes, worldwide
The aviation industry lobby, ATAG and its website "Aviation: Benefits Beyond Borders" is celebrating the 70th anniversary (7th December) of the signing of the Chicago Convention. This, shortly after WWII, set up international agreements for how air travel would be managed between countries, with some sensible details of how airspace should be used, standards of competence by the crews and air-worthiness of the planes. But it also had Article 24. This said aircraft flying to, from or across, the territory of a state shall be admitted temporarily free of duty. Fuel, oil, spare parts, regular equipment and aircraft stores retained on board are also exempt custom duty, inspection fees or similar charges. With international aviation in its infancy after WWII, most countries extended this exemption to all aviation fuel and enshrined it in dozens of bilateral aviation treaties between countries. So there remains no fuel duty on fuel, worldwide, for any commercial flights (there can be on private leisure flying). The House of Commons briefing note says: "Contrary to common perception, the 1944 Chicago Convention only precludes taxation of aircraft fuel in transit, a provision which can be seen simply as a safeguard against double taxation."
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Heathrow gets award as “Green Business of the Year” from a West London group that it sponsors
Awards ceremonies and the process of winning awards is an amazing business. Almost anything can get an award of some sort, especially if you are one of the sponsors of the award. If you want to think of any one place in the UK that is responsible for more air pollution or more carbon emissions, you will find few that beat Heathrow. But no. Heathrow has now won yet another (it has won two before) environmental award. This time it is from West London Business Awards. Heathrow was the winner in the "Green Business of the Year" category. The runner up was another sponsor of the awards, Westfield. As the local paper reports, with a tremendous Freudian slip, the Heathrow schemes were successful in ...."reduced local air quality levels." This has all been too much for a local resident, who has "improved" on the local newspaper story, with a slight twist .... to report on the comedy awards. One of the reasons for their award was "encouraging the use of car sharing", which is slightly spoilt by a photo, by the local writer, of a huge billboard advertising Heathrow's new business car park.
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Autumn statement 2014: Osborne to introduce ‘Google tax’ for large companies that shift profits abroad to avoid UK tax
In the Autumn Statement the Chancellor proposed a 25% levy on profits "artificially" shifted abroad to avoid tax by multinational companies. This is nicknamed the "Google Tax" to tackle companies like Amazon, Apple and Starbucks. However, the measures also apply to Gatwick which has complicated arrangements to keep its tax burden low - it has not paid UK corporation tax for years. “We will make sure that big multinational businesses pay their fair share,” Osborne said. The tax is intended to raise more than £1bn over the next 5 years by tackling aggressive avoidance. However, experts said the estimated £300m a year in extra revenues was just a fraction of the real profits multinationals are making in Britain. The rules for the Treasury’s “diverted profits tax” will be published in draft legislation on 10th December and introduced in April 2015. They are designed to hit companies that use artificial structures to minimise UK profits and therefore lower their UK tax bills.
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Air Passenger Duty on economy flights for children under 12 cut from May 2015 (under 16s from May 2016)
In the Autumn Statement, the Chancellor has announced that APD on children’s flights will be scrapped for all economy class tickets (not first class). From 1st May 2015, APD for children under 12 will be abolished and in May 2016, APD for all children under 16 is to go. This means the Treasury will miss out on £40 million in 2015/16 and £85 million in 2017/18 and £95 million in 2019/20. The air travel industry had called for the change on the basis that it would make an annual holiday more affordable for hard pressed families. But in fact it is most likely to benefit airlines, and those on higher incomes taking several flights a year. The families struggling the most financially might at most take one European flight per year (saving £13 per child). Those able to afford long haul trips will save £71 per child - so more savings for the better off? It airlines, airports and tour operators really wanted to help make an annual visit abroad affordable for more families, they could stop hiking their prices during the school holidays. The annual APD tax take will now be £3.2 billion in 2014/15 and still £3.2 billion in 2016/17 (while the 2011 Autumn statement estimated it would be £3.8 billion).
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Unknown cost to taxpayer of tunnelling M25 could equal several years total flood defence spending
If Heathrow airport was allowed to build its new north west runway, documents prepared for the Airports Commission by Jacobs indicate the cost of the works to tunnel the M25 (at its widest in that part of its circular route) could cost between £1.35bn to £3.22bn. How much Heathrow would pay is not yet clear. The cost would depend on the length of motorway affected and the cost per kilometre. Recent work to widen the M25 cost £3.4 billion for 35 kilometres. The Commission thinks that figure is too high, though it included 30 years-worth of maintenance (costing 20% of the total). The cost of the work should perhaps be around £50 million per kilometre, or more. The Commission says: "We note that the airport operator has suggested funding 50% of these works, with the remaining 50% borne by the public sector. The Airports Commission has not taken a view as to the split of funding between private and public sources and believes that this would be a matter for negotiation should the scheme be taken forward." By contrast the Government spent £2.3 billion on floor prevention for the 4 years 2011 to 2015.
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Extent to which “Back Heathrow” is funded by Heathrow, and is not a true community campaign, revealed
"Back Heathrow" is an industry funded pressure group, the aim of which is to drum up support for a 3rd Heathrow runway. It was set up with at least £100,000 from Heathrow airport - maybe more. Its website just says that it had money from Heathrow to set up. Matt Gorman from Heathrow admitted at a public meeting in Putney on 27th November than Heathrow continues to fund it, but nobody will give any figures. "Back Heathrow" is a classic astroturfing campaign (ie. making out that it is community led, when it is not). Its co-ordinator is Rob Gray, was previously a director of the Aviation Foundation, another lobbying group established by the industry. Other staff working for Back Heathrow are current or former Heathrow employees. They have recently distributed hundreds of thousands of glossy newspapers to households across west London, with no mention anywhere on these that they are paid for (at least in part) by Heathrow. They try to give the impression of being independent information. Back Heathrow claim to have 50,000 people signed up, but this is largely due to scare tactics, implying Heathrow workers will lose their jobs without a 3rd runway. This has now been revealed by the Sunday Times
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Low cost airlines may increasingly challenge older airlines on some long-haul routes
For years there have been plans by the low cost airlines to get into long haul routes. An interesting article in the Economist looks at various aspects, and how this may be starting to become more likely. In the past, the economics did not work. Newer planes using slightly less fuel per passenger, and able to travel longer distances, may make this possible, on busy routes like trans-Atlantic. The low cost airlines need to use their planes for more hours per day than legacy airlines have, and this means time differences and airports’ night curfews can make it harder to turn planes around quickly. If a plane has to stay away from its home base overnight, that means paying for crews’ accommodation costs. The older airlines can partly fill their long haul planes with short haul feeder traffic. But that is becoming less of a benefit as increasingly more passengers “self-connect” by booking each leg of a trip separately online. The full-service airlines are also ordering newer, more fuel efficient planes, but they have the burden, compared to new low cost airlines, of high costs of legacy pension schemes and labour agreements, making their fares inevitable higher. ie. More difficulties in forecasting future UK airport demand.